[Click eStock] "Nongshim Expands Overseas Business Share with Shin Ramyun Tomba Launch... Target Price Up"

KB Securities analyzed on the 2nd that Nongshim's operating profit is expected to increase due to the global launch of Shin Ramyun Tomba and the expansion of overseas business expenses amid a strong dollar environment. The investment opinion was maintained as 'Buy,' and the target stock price was raised to 520,000 KRW.

KB Securities forecasted that Nongshim's sales and operating profit in the fourth quarter of last year would increase by 5.8% and 16.7% year-on-year to 906 billion KRW and 45.4 billion KRW, respectively. Eun-ae Ryu, a researcher at KB Securities, stated, "Improvement in the performance of the U.S. subsidiary is expected due to the relocation of Walmart shelves and the operation of a new line at the second factory," adding, "Separate sales will grow thanks to the peak season effect for ramen and strong sales of Shin Ramyun Tomba."

In particular, this year, Shin Ramyun Tomba is expected to be launched globally, with performance improvements centered on the Americas region.

She emphasized, "Nongshim started local production and retailer entry of Shin Ramyun Tomba in the U.S. in November last year," and added, "Sales volume is expected to increase in North America, where the non-soup ramen market is rapidly growing, and in South America, where there is a high preference for spicy flavors." She further noted, "The relocation to the main shelves within Walmart in the U.S. has made it possible to display new Shin Ramyun brand products, which is expected to accelerate the sales of Shin Ramyun Tomba."

Along with this, performance improvement of the Chinese subsidiary is also expected.

She said, "As the collaboration results with Youbei become visible in 2025, the profitability of the Chinese subsidiary is expected to improve," adding, "The transfer of clients is expected to be completed in the fourth quarter of 2024, and discussions on online-centered collaboration are underway." She further added, "Focusing on growth channels and reducing overall expenses such as promotion and logistics costs are expected to improve the operating profit margin of the Chinese subsidiary."